Progressive and Proactive
Sound environmental practices are reaping big benefits for automotive recycling.
Not too long ago, Stellantis released a statement assessing the benefits of using remanufactured and recycled parts in the circular economy. Although the focus of this announcement was primarily aimed at European markets, it does signify a growing recognition among OEMs of the role recyclers play in the automotive ecosystem.
Tied in with that, has been the growth in interest of ESG (Environmental and Social Governance) initiatives. And although in many cases, recyclers themselves aren’t directly impacted by it, many of the stakeholders in our industry, such as insurers, OEMs and large, publicly traded collision repair networks and salvage auctions are, since stockholders are increasingly looking to invest in companies that have some kind of environmental sustainability practice in place. When we look at the OEMs for example, a lot of the current push toward vehicle electrification is being driven by ESG.
A big opportunity
At the recycler level, this is having an impact. There is a real opportunity for us to demonstrate to our stakeholders and indeed, the wider world, of the efforts we have and continue to undertake regarding environmental and sustainability practices. A key one is the Canadian Automotive Recyclers Environmental Code (CAREC). At ARC and OARA, we’re always looking for ways to make CAREC more relevant and the program recently received a major boost, in being recognized by the Alberta government. Today, in order to get an automotive recycler’s licence in Alberta, you need to have a CAREC audit performed on your facility and demonstrate compliance. In the near future the ability to have that certification renewed in order to maintain your licence will also require CAREC certification. Not only has it helped ARC’s membership surge in the province, it’s also galvanized more recyclers to take action and seriously look at CAREC compliance as an integral part of their business.
Even in the U.S., the idea of environmental compliance has been gaining traction. The Automotive Recyclers Association (ARA) has formed a partnership with eBay, and in order for recyclers to sell certain products on the eBay platform, such as airbags, they will need to ensure they have valid environmental certification. Back here in Canada, eBay has also taken a real interest in working with our members. They were a platinum sponsor at this year’s OARA Convention and have expressed a great deal of interest in understanding what the legalities are regarding environmental compliance.
Additionally, we’ve also seen the impact that programs like CAREC are having at the municipal level and where being a member of an association like ARC or OARA can make significant difference. In the Niagara region of Ontario for example, a new licencing bylaw was introduced requiring salvage operators to have $5 million worth of environmental insurance. For the average OARA member that’s a $5,000-$10,000 rider, provided you can get the coverage to begin with. OARA decided to get involved and put together a plan where, if operators become CAREC certified, they do not need to obtain this policy. The municipality agreed, and this represented a huge win, both for OARA and our members. And while those recyclers who join the program need to conduct audits, in the grand scheme of things, it is a small price to pay, given the benefits that being CAREC certified provides. And, as ESG continues to gain traction in the business community, it’s important for us as recyclers to show the wider world the steps we have and continue to take, to ensure our industry remains a vital, sustainable and environmentally responsible part of the circular economy.
Originally appeared in Autosphere December 2022.